employer use and regulation of employees in the virtual world

Utah Cyber Symposium 2011Utah Cyber Symposium 2011Supporting Professionals’ High Tech PresenceSupporting Professionals’ High Tech Presence

Thanksgiving PointThanksgiving Point

October 28, 2011October 28, 2011

Employer Use and Regulation of Employer Use and Regulation of

Employees in the Virtual WorldEmployees in the Virtual World

Charles Lee Mudd Jr.Charles Lee Mudd Jr.

Mudd Law OfficesMudd Law Offices

311 Main Street311 Main Street

Park City, Utah 84060Park City, Utah 84060

BackgroundBackground


High Tech High Tech

InternetInternet

VirtualVirtual

What is a Virtual World?What is a Virtual World?

A A virtual worldvirtual world is an is an online communityonline community that often takes the form of a that often takes the form of a computer-based simulated environmentcomputer-based simulated environment through which users can interact with through which users can interact with one another and use and create objects. one another and use and create objects. ((WikipediaWikipedia))

What is a Virtual World? What is a Virtual World? (cont’d)(cont’d)

Some questions…..Some questions…..

Might I know them by other names?Might I know them by other names?

Haven’t Virtual Worlds been around since Haven’t Virtual Worlds been around since the 1990s?the 1990s?


““A Rape in Cyberspace” by Julian DibbellA Rape in Cyberspace” by Julian Dibbell

See: Dibbell, Julian. "A Rape in Cyberspace." The Village Voice, December 21, 1993. Dibbell's article suggests that cybersex has indeed brought with it more than the pandering of sexual material.


Similar ComponentsSimilar Components

ChatroomsChatrooms

Electronic CommunicationsElectronic Communications


Are all Virtual Worlds alike?Are all Virtual Worlds alike?

Certainly not……Certainly not……

Examples of Virtual WorldsExamples of Virtual Worlds

Second Life Second Life The Sims OnlineThe Sims Online Dreamville Dreamville PlaydoPlaydo CyberTownCyberTown Club PenguinClub Penguin Disney’s ToontownDisney’s Toontown

Second LifeSecond Life

One of the most popular, Second Life, is One of the most popular, Second Life, is a 3D online, virtual world imagined and a 3D online, virtual world imagined and created by its “Residents.” created by its “Residents.”

((http://www.http://www.vintfalkenvintfalken

.com/second-life-a-world-imagined-created-and-owned-by-its-residents-no-more/.com/second-life-a-world-imagined-created-and-owned-by-its-residents-no-more/))


Even with Virtual Worlds, so follows Even with Virtual Worlds, so follows politics…..politics…..


In 2009, residents logged 124 million In 2009, residents logged 124 million user hours in the first quarter.user hours in the first quarter.

In 2010, 116 million user hours.In 2010, 116 million user hours. In 2011, 104 million user hours. In 2011, 104 million user hours.

(The Second Life Economy) (The Second Life Economy)

AvatarsAvatars

What is an Avatar?What is an Avatar?

The The graphical representationgraphical representation of the of the useruser or or the user's the user's alter egoalter ego or character. ( or character. (WikipediaWikipedia))

AvatarsAvatars

How is an Avatar different from other How is an Avatar different from other communication methods?communication methods?

Clothing? I need clothing?Clothing? I need clothing?

Employee-AvatarsEmployee-Avatars

Avatars as Employer Representatives Avatars as Employer Representatives

Employees who are AvatarsEmployees who are Avatars

Employee-AvatarsEmployee-Avatars

Employees have begun using avatars, or cartoonish Employees have begun using avatars, or cartoonish animated online characters, to represent themselves in animated online characters, to represent themselves in these meetings. Some companies and employees pick these meetings. Some companies and employees pick avatars that reflect their real identities — but other avatars that reflect their real identities — but other avatars are fantastical, whimsical, or gender-bending.avatars are fantastical, whimsical, or gender-bending.

((“Virtual Drag a thorny issue for employers” “Virtual Drag a thorny issue for employers” by by Maria Korolov)Maria Korolov)

Benefits of Avatar-Employee Benefits of Avatar-Employee RepresentationRepresentation

Saves moneySaves money

Travel, conference expensesTravel, conference expenses

Employee trainingEmployee training

Low-risk, low-costLow-risk, low-cost

Survey respondents reported frequent use of virtual worlds not Survey respondents reported frequent use of virtual worlds not only for recreational uses but also for work uses such as only for recreational uses but also for work uses such as brainstorming (48%) and project coordination (36%)brainstorming (48%) and project coordination (36%)

Employer Use of Virtual WorldsEmployer Use of Virtual Worlds

HiringHiring

Recruit EmployeesRecruit Employees

Networking online for those seeking employmentNetworking online for those seeking employment

Conducting employee training and new-hire Conducting employee training and new-hire orientationsorientations

Virtual meetings. Virtual meetings.

Companies and AvatarsCompanies and Avatars

Communication and PracticalityCommunication and Practicality

Thousands of employees at companies like IBM, Thousands of employees at companies like IBM, Cisco, SAP, and Boeing have been using avatars to Cisco, SAP, and Boeing have been using avatars to interact with colleagues and customers around the interact with colleagues and customers around the world. world.

Companies with Second Life PresenceCompanies with Second Life Presence

Sun MicrosystemsSun Microsystems

ReutersReutersVirtual JournalismVirtual Journalism

DellDell

Cisco SystemsCisco SystemsHosts SpeakersHosts Speakers

H&R BlockH&R BlockCan buy online tax prep softwareCan buy online tax prep software

Geek SquadGeek SquadIT AssistanceIT Assistance

Corporate Planners Unlimited, Corporate Planners Unlimited, Inc., (a corporate events and Inc., (a corporate events and travel company)travel company)

Virtual events services.Virtual events services.

And…..And…..

Companies with Second Life PresenceCompanies with Second Life Presence

IBMIBM

Showcases its productsShowcases its products

Avatars can test them outAvatars can test them out

In 2007, IBM had 12 virtual properties in Second Life, using them for In 2007, IBM had 12 virtual properties in Second Life, using them for training, meetings, and recruitment. training, meetings, and recruitment.

In 2010, IBM had over 35 virtual properties in Second Life and even In 2010, IBM had over 35 virtual properties in Second Life and even offered design solutions for other companies interested in having a offered design solutions for other companies interested in having a presence in Second Life. presence in Second Life.

Employer Use of Virtual WorldsEmployer Use of Virtual Worlds

Saved for Discussion…..Saved for Discussion…..

Why Should Employers Be Concerned?Why Should Employers Be Concerned?

Sexual HarassmentSexual Harassment Growth of Virtual WorldsGrowth of Virtual Worlds Dilution of Brands and Dilution of Brands and

MarksMarks Defamation and Other Defamation and Other

TortsTorts

Competition Related Competition Related IssuesIssues

Violation of TOSViolation of TOS AgencyAgency Recorded EncountersRecorded Encounters And More……And More……


Sexual Harassment Sexual Harassment

SH can take place via email, social networks, in SH can take place via email, social networks, in person, or in virtual worlds.person, or in virtual worlds.

Employers have obligations to create and enforce Employers have obligations to create and enforce guidelines for appropriate behavior.guidelines for appropriate behavior.

Employers must take immediate measures when a Employers must take immediate measures when a complaint is made.complaint is made.

No Different in VWNo Different in VW

Why Should Employers be Concerned?Why Should Employers be Concerned?

Sexual Harassment (cont’d)Sexual Harassment (cont’d)

Law enforcement agencies estimate that Law enforcement agencies estimate that electronic communications are a factor in 20-electronic communications are a factor in 20-40 percent of stalking cases. 40 percent of stalking cases.

Forty-four states have laws that include Forty-four states have laws that include electronic forms of communication within electronic forms of communication within stalking or harassment laws.stalking or harassment laws.

Sexual HarassmentSexual Harassment

I need Clothing? But, you are a woman?!I need Clothing? But, you are a woman?!

As use of virtual worlds in business increases, employers need to be As use of virtual worlds in business increases, employers need to be cognizant of extending corporate dress codes to virtual worlds. This cognizant of extending corporate dress codes to virtual worlds. This can manifest itself in a number of ways. can manifest itself in a number of ways.

Employers should be allowed to insist that employee-avatars reflect Employers should be allowed to insist that employee-avatars reflect their offline professional identities and/or comply with the same dress their offline professional identities and/or comply with the same dress codes imposed or appropriate for physical workplaces. codes imposed or appropriate for physical workplaces.

Some companies, like IBM, adopt a more progressive policy and allow Some companies, like IBM, adopt a more progressive policy and allow employees flexibility with how they express themselves in an online employees flexibility with how they express themselves in an online environment.environment.

Dress Code StatisticsDress Code Statistics

By the end of 2013, 70% of companies will By the end of 2013, 70% of companies will have set behavior guidelines and dress code have set behavior guidelines and dress code for employee-avatars. for employee-avatars.

November 2009November 2009

Addressing Dress Code ConcernsAddressing Dress Code Concerns

Employee-Avatar’s behavior and appearance reflect the Employee-Avatar’s behavior and appearance reflect the individual and their employer individual and their employer

Employers must understand that many employees "dress Employers must understand that many employees "dress up" their avatars to express creativity and imaginationup" their avatars to express creativity and imagination

Consider Encouraging Representation of Employer with Consider Encouraging Representation of Employer with Cautionary Approach That Allows Individual ExpressionCautionary Approach That Allows Individual Expression

Addressing Dress Code ConcernsAddressing Dress Code Concerns

Encourage employees to represent the Encourage employees to represent the companycompany

Educate employees about the "risks and Educate employees about the "risks and responsibilities of reputation management" in responsibilities of reputation management" in online environmentsonline environments

Encourage use of separate avatars for Encourage use of separate avatars for personal and professional use to avoid liability personal and professional use to avoid liability and reputation situations. and reputation situations.

Dress Code ImplementationDress Code Implementation

Remember Corporate Planners Unlimited, Inc…….?Remember Corporate Planners Unlimited, Inc…….?(a corporate events and travel company)(a corporate events and travel company)

There are about twenty people in the company’s Virtual convention There are about twenty people in the company’s Virtual convention center in Second Life. center in Second Life.

The company employees dress in a company uniform-black pants and The company employees dress in a company uniform-black pants and white shirts with the company logo.white shirts with the company logo.

When organizing a conference, President Dan Parks and his staffers will When organizing a conference, President Dan Parks and his staffers will create avatars for everyone who plans to attend with a conservative create avatars for everyone who plans to attend with a conservative business appearance. Or, if the customer requests custom avatars, they business appearance. Or, if the customer requests custom avatars, they can be built using actual photos of the people.can be built using actual photos of the people.


Intellectual Property Issues Intellectual Property Issues


Intellectual Property IssuesIntellectual Property Issues

Disclosure of IPDisclosure of IP

Brand and Mark TarnishmentBrand and Mark Tarnishment



IP rights to creations in virtual world. IP rights to creations in virtual world.

Avatars are considered the owners of certain intellectual Avatars are considered the owners of certain intellectual property involved and created by them in the virtual world.property involved and created by them in the virtual world.

Up to 80% of the content has been created by the users Up to 80% of the content has been created by the users

Between Employer and Employee - Who Owns IP?Between Employer and Employee - Who Owns IP?



Virtual worlds are designed to allow for gamers Virtual worlds are designed to allow for gamers to build up their avatars in the virtual society by to build up their avatars in the virtual society by earning virtual currency and developing skills. earning virtual currency and developing skills.

Both real and personal property can be Both real and personal property can be purchased or created in the virtual world and purchased or created in the virtual world and used by avatars. used by avatars.



Many VW residents have begun to sell their digital Many VW residents have begun to sell their digital goods or property for real world moneygoods or property for real world money

Currency Exchange Currency Exchange

Some examples of most popular and successful Some examples of most popular and successful business are clothing designers, entertainment business are clothing designers, entertainment complexes (eg virtual skydiving).complexes (eg virtual skydiving).

Other Specific IP IssuesOther Specific IP Issues

Copyright InfringementCopyright Infringement

Radio Stations in Virtual Worlds that broadcast music Radio Stations in Virtual Worlds that broadcast music without a licensewithout a license

Distribution of booksDistribution of books

Distribution of movies to watch in one’s “virtual home.” Distribution of movies to watch in one’s “virtual home.”


Trademark LawTrademark Law

Concern for real world companiesConcern for real world companies

Products or marks are being counterfeited in virtual Products or marks are being counterfeited in virtual worlds. worlds.


Trademark LawTrademark Law

Question regarding the nature of virtual goods: Question regarding the nature of virtual goods:

If a user makes a pair of name brand shoes in If a user makes a pair of name brand shoes in Second Life (for example, Nike) and sells them, is Second Life (for example, Nike) and sells them, is the user selling shoes, a picture of shoes, or the user selling shoes, a picture of shoes, or something altogether new?something altogether new?


Communication RisksCommunication Risks

Many industries have legal or regulatory limits about communications.Many industries have legal or regulatory limits about communications.

In brokerage firms, for example, certain traders are not supposed to In brokerage firms, for example, certain traders are not supposed to talk to certain analysts.talk to certain analysts.

Lawyers and doctors face constraints about what kind of advertising Lawyers and doctors face constraints about what kind of advertising they are allowed to engage in in some jurisdictions. they are allowed to engage in in some jurisdictions.


Communication RisksCommunication Risks

Courts and regulators have been consistent in viewing electronic Courts and regulators have been consistent in viewing electronic communications as subject to oversight, and have fined companies communications as subject to oversight, and have fined companies millions for mishandling emails or instant messages.millions for mishandling emails or instant messages.

The Financial Industry Regulatory Authority released guidelines on the The Financial Industry Regulatory Authority released guidelines on the use of social networking technologies. use of social networking technologies.

It is likely that communications in virtual world would be subject to the It is likely that communications in virtual world would be subject to the same regulatory requirements – if they aren’t already.same regulatory requirements – if they aren’t already.

CasesCases

Amaretto Ranch Breedables, LLC v. Ozimals, Inc.Amaretto Ranch Breedables, LLC v. Ozimals, Inc.

Copyright dispute between business competitors who Copyright dispute between business competitors who sell virtual animals in the virtual world “Second Life.”sell virtual animals in the virtual world “Second Life.”

Claims: (1) misrepresentation; (2) tortious interference with Claims: (1) misrepresentation; (2) tortious interference with

prospective business advantage; (3) unfair competition under prospective business advantage; (3) unfair competition under California Business and Professions Code; and (4) misuse of California Business and Professions Code; and (4) misuse of copyright.copyright.

Plaintiff sought a temporary and preliminary restraining order Plaintiff sought a temporary and preliminary restraining order preventing Defendant from removing Plaintiff’s virtual horse preventing Defendant from removing Plaintiff’s virtual horse product line. product line.

CasesCases

Amaretto Ranch Breedables, LLC v. Ozimals, Inc.Amaretto Ranch Breedables, LLC v. Ozimals, Inc.

Court granted Plaintiff’s requestCourt granted Plaintiff’s request

Defendant filed Motion to DismissDefendant filed Motion to Dismiss

Amaretto Ranch Breedables, LLC v. Ozimals, Inc., 2011 U.S. Dist. Amaretto Ranch Breedables, LLC v. Ozimals, Inc., 2011 U.S. Dist. LEXIS 52796 (N.D. Cal. Apr. 22, 2011)LEXIS 52796 (N.D. Cal. Apr. 22, 2011)

CasesCases

Bragg v. Linden Research, Inc. Bragg v. Linden Research, Inc.

Plaintiff, owner of virtual property on Second Life, sued Plaintiff, owner of virtual property on Second Life, sued defendants, operators of Second Life, for a number of defendants, operators of Second Life, for a number of claims arising out of the operators’ removal of certain claims arising out of the operators’ removal of certain virtual property purchased by plaintiff.virtual property purchased by plaintiff.

Plaintiff argued that the operators of the site unlawfully confiscated Plaintiff argued that the operators of the site unlawfully confiscated his virtual property and denied him access to their virtual world. his virtual property and denied him access to their virtual world.

Court found the arbitration provision in Second Life to be Court found the arbitration provision in Second Life to be unconscionable and the parties reached a settlement. unconscionable and the parties reached a settlement.

Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. PA 2007)Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. PA 2007)

Creative Use of AvatarsCreative Use of Avatarsand Employee Worlds by Employersand Employee Worlds by Employers

Policy DevelopmentPolicy Development

Social Media or Separate ConcernsSocial Media or Separate Concerns

Spell Out Specifically Due to Unique SituationsSpell Out Specifically Due to Unique Situations

Monitor Communication PolicyMonitor Communication Policy

Supreme Court RulingSupreme Court Ruling

City of Ontario, California v. QuonCity of Ontario, California v. Quon

Further ConsiderationsFurther Considerations

Establishing Employee Avatar Establishing Employee Avatar Appearance CodesAppearance Codes

What employers should consider: What employers should consider:

Extend existing employee code of conduct to include Avatars in virtual Extend existing employee code of conduct to include Avatars in virtual environments.environments.

Enforce Avatar appearance codes equally and fairly. Enforce Avatar appearance codes equally and fairly. Employment Discrimination laws require that employers establish uniform Employment Discrimination laws require that employers establish uniform guidelines applicable to all. guidelines applicable to all.

Establishing Employee Avatar Establishing Employee Avatar Appearance CodesAppearance Codes

What employers should consider: What employers should consider:

Avoid content-based regulationAvoid content-based regulationEmployers should not develop appearance codes that could form the basis Employers should not develop appearance codes that could form the basis of a discrimination claim (ie, bans on religious symbols)of a discrimination claim (ie, bans on religious symbols)

Train employees on the risks and responsibilities of workplace Avatars.Train employees on the risks and responsibilities of workplace Avatars.

Policy DevelopmentPolicy Development

IBMIBM Guidelines for EmployeesGuidelines for Employees

Further Considerations Further Considerations

Employer DisciplineEmployer Discipline

Establish PolicyEstablish Policy

Policy ConsistencyPolicy Consistency

Other MeansOther Means

Regulation of off-duty Internet ActivityRegulation of off-duty Internet Activity

Waiters sued their restaurant for unauthorized access of their Waiters sued their restaurant for unauthorized access of their Facebook pages Facebook pages

Delta flight attendant fired after posting suggestive photos of herself Delta flight attendant fired after posting suggestive photos of herself in her uniform in her uniform

Employee complained about her supervisor on her personal Employee complained about her supervisor on her personal Facebook page after being denied union representation at an Facebook page after being denied union representation at an investigatory interview. Employer discovered the complaint and investigatory interview. Employer discovered the complaint and terminated the employee. terminated the employee.


Laws that may apply: Laws that may apply:

National Labor Relations ActNational Labor Relations ActWhen considering taking adverse action against an When considering taking adverse action against an employee based on – or after obtaining knowledge about – employee based on – or after obtaining knowledge about – the employee’s social media statements or conduct, you the employee’s social media statements or conduct, you should at a minimum consider whether that employee was should at a minimum consider whether that employee was arguably engaging in protected activity under a statute such arguably engaging in protected activity under a statute such as the NLRA. as the NLRA.

State Laws State Laws Some states such as California, Colorado, Connecticut, New Some states such as California, Colorado, Connecticut, New York and North Dakota, have enacted statutory protections York and North Dakota, have enacted statutory protections for employees who engage in lawful off-duty conduct for employees who engage in lawful off-duty conduct


Discrimination and retaliation concernsDiscrimination and retaliation concernsFor example, in many jurisdictions, a company may not For example, in many jurisdictions, a company may not discriminate against employees who are in the process of discriminate against employees who are in the process of changing their gender, or who have already done so. The changing their gender, or who have already done so. The laws do not cover casual cross-dressing by non-transgender laws do not cover casual cross-dressing by non-transgender employees, however. employees, however.

Whistleblower Laws Whistleblower Laws

Political Activity LawsPolitical Activity Laws

Wage Disclosure LawsWage Disclosure Laws


Constitutional Right to Privacy and Free SpeechConstitutional Right to Privacy and Free Speech

Online Live DemoOnline Live Demo

Final Comments and QuestionsFinal Comments and Questions

Of me…..Of me…..

……..or our virtual avatars…..?..or our virtual avatars…..?

Thank YouThank You Charles Lee Mudd Jr.Charles Lee Mudd Jr.

[email protected]@muddlaw.pro


Park City, UtahPark City, Utah

311 Main Street311 Main Street

P.O. Box 483P.O. Box 483

Park City, Utah 84060Park City, Utah 84060

435.640.1786 Telephone435.640.1786 Telephone

435.603.1035 Facsimile435.603.1035 Facsimile

Chicago, IllinoisChicago, Illinois

3114 West Irving Park Road3114 West Irving Park Road

Suite 1WSuite 1W

Chicago, Illinois 60618Chicago, Illinois 60618

773.588.5410 Telephone773.588.5410 Telephone

773.588.5440 Facsimile773.588.5440 Facsimile

employer use and regulation of employees in the virtual world

Technology

virtual properties

havent virtual worlds

examples of virtual

employer use of virtual

frequent use of virtual

employeeavatars avatars

employeeavatars employees

avatars communication